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November 8, 2019 By Jen Lee

Are Your Finances Making You Sick?

I often talk about people I meet who have various illnesses and health problems because of the debt and financial stress they are facing. The reason I talk about it is because people often feel isolated and alone, so they hesitate to get advice or find out their options because others will think less of them.

Some of the things I see on a regular basis are depression, insomnia, stomach issues, headaches, and anxiety. I once had someone tell me that she could not remember the last time she slept through the night without waking up in a panic. That kind of stress has a profound effect on your health.

An article in the NY Post this week also talks about this issue. The article has some alarming statistics about consumer debt, which is now over $14 trillion and significantly higher than consumer debt was back in 2008.

The stress also makes people more susceptible to scams and services that are not necessarily the best way to resolve the problem. Make sure you find out all of your options and not just the one the person on the phone is trying to sell you. We talk to people every day who signed up for a service and did not fully understand the long-term consequences, which caused even more stress.

Remember, you are by no means alone in dealing with financial stress. You would be very surprised at the number of people in your everyday life who have the exact same issues and everyone is afraid to talk about it. Your best step is to find out what you can do for your situation and make an informed decision.

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Mindset

June 9, 2019 By Jen Lee

Do You Read Your Paystubs?? You Should!

I hear this all the time from people who are not even clients or in a position where they may need to talk to a debt and credit attorney, but it is also prevalent among those needing help. Over and over again, people tell me that they don’t even look at their paystubs and that it is direct deposit to their bank accounts.

Or, even worse, they don’t know how to get copies of their paystubs because the money just goes into their account each week (or 2 weeks, monthly, however often they get paid).

There are several reasons you should look at your paystub and know how to get them:

  1. Deductions for benefits, ancillary benefits (like supplemental life insurance), or other company programs are often wrong. Miscalculations happen all the time and you should really be paying attention at the beginning of the year, or whenever your new benefits go into effect, to how much is being deducted from your check. I also often ask what a deduction is for and people have no idea why their employer is deducting for certain things.
  2. Severe under-withholding or over-withholding on taxes, so that you get to the end of the year and you either have a huge balance due or a huge refund. There are easy tools out there to figure out how much you should be withholding from your pay to make sure that you are on track. In fact, the IRS has a great withholding calculator that will tell you what your exemptions need to be set at to not owe taxes. Please note that you have to use your paystubs to use the calculator!
  3. Gross income is important to know. Gross income is what you get paid before any deductions are taken out. Almost everyone can tell me how much money is deposited into their account on payday, but very few know how much they make from a total income standpoint. If we are looking at a potential bankruptcy strategy, gross income is used to begin the calculations.
  4. Finally, looking at your paystubs is one of the first steps to getting finances organized. We have a tendency to not look at things that stress us out (like a list of our debt, our credit score if it is low, and…our paystubs). It’s hard to create a full financial plan and budget if you don’t know what those numbers look like.

If you don’t know how to read your paystub or see deductions that you don’t understand, which can be common because each company often uses different abbreviations for things, talk to your human resources department about what is being deducted and how to change your withholdings, if necessary.

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Mindset

April 26, 2019 By Jen Lee

Wouldn’t It Be a Great Idea if I Added My Son/Daughter/Dog to the Title of My House??

There are a couple variations of this question, but if often comes up when we are talking to clients. We’ll run through a few ways this comes up and why adding people to deeds is probably not a good idea. 

First example: A client comes in and has assets that she wants to protect from creditors, for example, her house. The house has a lot of equity and she does not want liens against the house. She asks, “Can’t I just transfer the title of my house to my son?”  

There are a few problems with this idea. From an estate planning and tax standpoint (and I’m not an estate planning attorney, so consult an expert regarding your own situation), but there are potentially significant tax consequences to transferring property this way. From a creditor standpoint, it may be considered fraud if you transfer assets knowing that there are claims against you. That can be a complicated analysis, and depending on which statute is being used, can go back as far as 6 or 7 years to see if you transferred property to avoid creditors being able to collect. 

Second example: Same situation as above with a house that the client is trying to protect from creditors, but now asks, “Can I SELL the house to my son for $1?”  

Lots of issues here, especially with selling property for less than fair market value and selling to a family member. From a creditor standpoint, it is still a transfer and may be considered fraud if a creditor is able to show that it was done to hinder collections by creditors. 

Third example: A client comes in and does not really have any assets, mostly unsecured credit card debt, and looks like a Chapter 7 bankruptcy would be the best option for a fresh start. Towards the end of the conversation, he says, “Oh, by the way, my parents added me to the deed of their house a few years ago for estate planning. The house is worth $1.5 million and they own it free and clear. That won’t be a problem, right?”  

Wrong. In a Chapter 7, the trustee’s job is to find assets that are available to sell to pay your creditors. You now have an interest in a $1.5 million house that the trustee would be interested in selling, or at least making a deal to get your creditors paid through some sort of settlement with you and/or your parents. The case has gone from a simple Chapter 7 to a complicated analysis and some risk if you decide to move forward. 

The best practice for all of these situations is to do proper estate planning, don’t transfer deeds to family members without getting advice on the consequences of that transfer, and don’t transfer assets to try to get away from creditors. Do proper planning before you need it, as that will be the most efficient (and least expensive!) option. 

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Bankruptcy, Bankruptcy Process, Mindset

April 19, 2019 By Jen Lee

I didn’t know! I didn’t know you could help me!

I wish I had a dollar for every time this phrase was uttered in my office (or at a speaking engagement). I keep talking, speaking, writing, and creating videos because I hear over and over from my clients that they wish they had known that someone could help them a long time ago. After a very busy week, here are some of the things people didn’t know:

  1. Student loan consolidation can help get a student loan out of default and back on track with income-based repayment (referring to federal student loans).
  2. You can get a mortgage while in Chapter 13 bankruptcy.
  3. Filing bankruptcy may make your credit score go up.
  4. Taxes are often effectively dealt with in bankruptcy.
  5. You would get sued when you signed up with a debt settlement company.
  6. Your credit score would drop with just one missed payment.
  7. Your wages could be garnished for your spouse’s debts from prior to marriage if you don’t do something to protect yourself.
  8. Chapter 7 is not a good option if you have assets you want to keep, unless you have a plan.
  9. Adding an authorized user to your credit card may make their score go down.

The reason I list all of these things out and talk about pretty similar things every week is because so many people don’t know that there are often solutions available for their situations. We almost always hear from people in our office that they felt they were the only ones with these types of problems and didn’t know that a majority of Americans have a debt or credit problem of some sort that they really could use help with solving.

Google is an awesome tool, but I find that so many people find bad information or don’t know to keep digging for more details on their individual situation. Very rarely do I recommend the exact same thing for each of our clients. Every case has a different detail that makes certain options better than others.

So, you may not know everything right now, but there are options for you if you ask!

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Bankruptcy, Debt Consolidation, Mindset

March 14, 2019 By Jen Lee

“I Have to Take Out Student Loans to Help My Child! Or, Maybe I Should Bribe Someone!”

In light of the recent cheating scandal for college admissions that’s been widely reported in the last couple of days, I want to twist it a bit to something I hear all the time and be a bit controversial in the process. When we are talking about bankruptcy or other financial disaster planning, people are always worried about their credit and if they will still qualify for student loans for their kids. So, they are in the middle of financial disaster and trying to figure out how to qualify for…more loans.

Honestly, not qualifying for student loans for someone else’s education is a total blessing in disguise. I am a huge proponent of not taking Parent Plus loans and not co-signing student loans. I cannot tell you how many clients I have in their 50s, 60s, 70s, and even 80s who are trying to deal with student loan issues, including having their Social Security garnished at 15% for federal loans that are in default.  

What will happen if your child (adult child) can’t afford to go to a $60,000/year university on their own? Well, first of all, $60,000/year universities will have to adapt to people choosing less expensive avenues. The huge inflation in college education costs comes from easy money (that can’t be discharged in bankruptcy, how convenient) and from everyone thinking that they have to go to the highest-ranked college to get a decent job. 

One of the celebrities caught up in the cheating scandal has a daughter who has publicly announced that she doesn’t want to be in college at all and is more interested in YouTube. Do you know how much money can be made if you have something that other people are interested in? There is an 7 year old kid making more than $20 million a year doing toy reviews on YouTube. Not that I am encouraging everyone to go out and be a YouTube sensation, but parents put so much pressure on the traditional college path that they totally miss out on the creativity and innovative ideas that kids and young adults have. And part of that pressure is trying to pay for really expensive college educations that are mostly unnecessary.

As an employer, I don’t actually care if someone has a degree. I care about their abilities, their drive, their experience, and what they bring to the table. There are a lot of big companies out there that are missing out on the next generation of innovators because they won’t hire someone who doesn’t have the “right” degree. Ask me how I know. I did my bachelor’s and master’s degrees online (back before online was a thing – it was really correspondence school). I’m pretty much blacklisted from some companies as soon as I list those degrees on my resume. Their loss.  

Please do not take out student loans for your kids. Please encourage them to find what they are good at, even if it’s something you don’t understand. Oh, and please don’t bribe people so that your kids get higher test scores (I kind of feel that I shouldn’t have to say that, but apparently, it’s a thing). 

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

Filed Under: Mindset, Student Loans

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Jen Lee Law, Inc. is a federally designated Debt Relief Agency. Jen Lee helps clients file for bankruptcy protection under the laws of the United States.

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